U.S. phone portability rules begin to go into effect November 24th. Will the …

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Earlier this week, the FCC threw the hammer down on wired and wireless carriers by affirming that phone number portability rules were meant for everyone. This means a wireless phone number can be transferred when a user switches carriers, and also means that a landline number can be transferred to a wireless carrier. This mandate goes into effect November 24th in the 100 largest markets and May 24, 2004 for smaller markets. Many analysts believe this move will further intensify both wired and wireless carriers' efforts to gain customers, and think millions will ditch their landline and move completely wireless. Their main reasoning is that carriers had a stranglehold on the customer's phone number, and now that the customer can take their number with them, it will empower them to search and bargain for the best deal available. This may be true for those who wish to switch from a landline carrier, but lack of portability is only one factor keeping many from switching wireless carriers. Other factors include contract commitments and cell phones that are tied to a particular service. Even with portability, the customer may not come out ahead if they have to pay early termination fees and/or dish out for a new cell phone. For wireless carriers, the contract commitment is the the trump card that will keep things from turning into the free-for-all analysts are expecting.

My pessimism eased a bit following a call I received this afternoon. After seeing a strange number on my cell's caller ID, I immediately thought the telemarketers were invading my cell phone, but it turned out to be a Sprint representative who called to see if they could save money on my bill. I cracked a smile because I then knew the wireless carriers are scared of the new portability rules. I informed him there wasn't much he could do (I negotiated a pretty good deal through Sprint's retention program earlier this year), and he could only come up with a $2.50 /month reduction in exchange for a two year contract. Of course I declined his (ahem) generous offer. Upon returning home, I found that other carriers are scared of the portability rules and have started offering incentives to keep current customers and lure others from competitors. But let the buyer beware &#151 the carriers are only offering these incentives with the hope they will lock the customer into a one- or two-year contract before they can find a better deal after portability kicks in. Yes, phone number portability will give customers more freedom in choosing carriers and better deals will be found in the upcoming months, but don't expect carriers to give up on the good ol' contract commitments in the near future.